Average Revenue Per User May Fall Further, Bharti Airtel Warns
Airtel management says it will never offer services ‘for free’.
Bharti Airtel Ltd. which reported its lowest ever average revenue per user in the fourth quarter of financial year 2016-17, has warned that the figure could fall further. The country’s largest telecom operator has been forced to cut tariff after Reliance Jio Infocomm Ltd. started operations in September last year.
The Airtel management held a post-earnings conference call with analysts on Wednesday in which it did not rule out further tariff cuts, as it tries to increase market share in the country. But it added that the company would never provide free services, as had been done by Reliance Jio in its first six months of operations.
Airtel has maintained its capital expenditure at $3 billion for the current financial year, which will mainly be used to upgrade its 4G network in India.
In earnings released on Tuesday Airtel’s profit fell more than 70 percent in the fourth quarter of financial year 2016-17. But on Friday the stock posted its highest intraday gain in more than seven years as investors may have taken heart from the rise in the number of active users. A block deal of nearly 2.7 million shares at Rs 373 apiece triggered the rally.
The telecom major had recently sold 10.3 percent stake in its tower company Bharti Infratel Ltd., for Rs 6,194 crore in order to pare debt, but said any further stake dilution will only be considered as a ‘last resort.’